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ITWeb Africa

Monday, Oct 21st

Kenya licenses first online forex entity

Kenya licenses first online forex entity

The Capital Markets Authority (CMA) has licensed Kenya's first online forex trading platform enabling hundreds of forex traders to trade with legal oversight, in accordance to new regulations.

Execution Point Limited, a UK registered firm, is the company that has been licensed as a Non Dealing Online Foreign Exchange Broker, meaning they will not be trading but offering their platform to other users.

"Non-dealing Online Forex Brokers avail a trading platform to their clients that enables the clients to trade from anywhere and at any time using their electronic devices," the CMA said in a statement.

"The platform provides access to global markets and also provides an opportunity to clients to educate themselves on the global financial markets," it added.

Execution Point Limited will only earn money on commission of every trade.

"Clients deposit their investment amount with an account to be offered by the broker. The trader (client) is responsible for executing trades - buying and selling of any products on the platform and the requisite risk assessments are undertaken to determine suitability of clients to participate in online forex trading," the CMA explained.

In August 2017 the CMA introduced the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017 that would require online trading platforms to obtain a license.

According to the regulations, online brokers need to raise Kshs 50 million (US$ 500,000) minimum capital if they are a dealing broker, Kshs 30 million (US$ 300,000) if they are non-dealing broker and they are all required to have liquid capital of Kshs 30 million (US$300,000) shillings or eight percent of total liabilities, whichever is higher.

This is to protect traders from risks associated with forex trading.

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